Touchstar Plc Regulatory News (TST)

6 Mar 2008 07:00

Belgravium Technologies PLC06 March 2008 For Immediate Release 6 March 2008 Belgravium Technologies Plc (BVM:AIM) Preliminary Results for the year ended 31 December 2007 The Board of Belgravium Technologies plc ("Belgravium" or "the Group"),designers and manufacturers of real time mobile computing systems, is pleased toannounce Preliminary results for the year ended 31 December 2007. FINANCIAL HIGHLIGHTS • Turnover £10,637,000 (2006: £10,922,000) -2.9%• Profit before tax £2,053,000 (2006: £1,844,000) +11%• Final Dividend 0.38p (2006: 0.36p) +5.5%• Earnings per Share 1.41p (2006: 1.27p) +11% OPERATIONAL HIGHLIGHTS •Profit growth demonstrates Belgravium's world leading status in mobile computing systems for logistics and retail markets •Development of International sales pipeline •Commercial emphasis on software sales: significant sales opportunities achieved •Further synergies through rationalised operations creating margin improvement Commenting today, Executive Chairman John Kembery said: "I am pleased to report a good year in 2007. The Group has strengthened itsposition in specialised market sectors whilst simultaneously increasing profits.This is a great achievement against a backdrop of heightening global economicuncertainty. The businesses of Touchstar and Novo have once again made valuable contributionsto the Group's improved profits and earnings per share in 2007, with year onyear growth in EPS at 14%, the second consistent year of double digit growth. These results demonstrate the inherent strengths within our market leadingbusiness and we look forward to the opportunities in the year ahead." For further information please contact: Belgravium Technologies plc 07770 731021John Kembery, ChairmanBuchanan Communications 020 7466 5000Suzanne Brocks www.belgravium-IR.com CHAIRMAN'S STATEMENT Results I am pleased to report a successful year for Belgravium in 2007. We have achieved a profit before tax of £2,053,000, an increase of 11% on the2006 figure of £1,844,000, on turnover of £10,637,000 (2006: £10,922,000) assynergistic efficiencies from the acquisitions of Novo IVC and Touchstar wererealised. Earnings per ordinary share also grew by 11% to 1.41p per share, (2006: 1.27pper share), the second consecutive year of double digit growth, following the31% uplift reported in 2006. Operational Review 2007 was a year in which Belgravium succeeded in improving profits whilstconsolidating its position as a world leader in certain specialised mobilecomputer markets. When Touchstar was acquired at the end of 2005, it was recognised that theCompany had a unique combination of skills and products to supply theinternational petrochemical distribution market. Further, this market offeredplenty of scope for development and growth. The petrochemical market isworldwide and customer service is vital. Accordingly, sales are best servedthrough a combination of business partners and agents. Whilst Touchstar servicessmaller contracts closer to home, the larger projects have required the buildingof an overseas network. Development of Touchstar's international sales is acontinuous process and much has been achieved in 2007 which will bring benefitsin the future. The other major attraction of the Touchstar acquisition was the opportunity torationalise technical and production operations. This brings greater efficiencyand cost benefits from more co-ordinated activity and less reliance onoutsourcing. This process has continued with great success during 2007. At the same time, we have focussed commercial emphasis on the sale of softwareand support services. The resulting costs and operating margin improvements have enabled the Group toincrease profits at the same time as developing our international salespipeline. Novo IVC, acquired in early 2006, was quickly integrated as a sales division ofTouchstar. As market leader in developing software for mobile retail systems,for example, aircraft and trains, Novo already had a strong forward salesposition. In 2007 we were able to build on that position, gaining some goodcontracts from this sector. Belgravium Limited supplies real time data capture systems to the warehousingand logistics market, largely within the British Isles. From a technical andoperational viewpoint, activities have been substantially integrated withTouchstar, again with significant cost savings. Sales, in this sector tend to bemore specialised, but we are pleased to report that, in 2007, we have beenhighly successful in gaining solid progress in this more mature market. Onceagain, we have concentrated on the highest quality of products and services andon providing a comprehensive and conclusive solution to customer needs. In summary, across all three divisions, 2007 has been a good year, in whichBelgravium has strengthened its position in its specialised market sectorswhilst materially increasing profits. Product Development We have now integrated our product development capabilities across the entireGroup, focussed through two main activities: 1. Solutions to short term operational customer queries forexisting hardware and software 2. Development of new products, refining both hardware andsoftware designs to address ever-changing consumer demand. Smaller, lighterhardware and software extending the existing scope of activities is in constantdemand. In 2007 we have made advances in both these areas, bringing improved products toall divisions, in addition to an entirely new design concept which will launchin 2008. We recognise the consistent level of work required to ensure our rangeof software is world class. It remains management's objective to produce steady growth in profits anddividends, optimising the return to shareholders. Our products must address manydemands in what can be challenging industrial and retail applications, meetingstringent approvals in each of the sectors we serve. Our aim is to produce totalsolutions for our client base, providing not just hardware and software but alsothe associated maintenance and support. This provides a greater degree ofrecurring income and therefore visibility in our earnings stream. Balance Sheet Belgravium's balance sheet has consistently shown a steadily strengtheningposition. Net debt reduced from £2,589,000 in 2006 to £1,962,000 in 2007. It isusual for Belgravium's sales to be weighted towards the final quarter of thefinancial year although in 2007 this was particularly pronounced. As a result,trade debtors as at 31 December were higher than usual, a position that hasstarted to reverse post year end. The Group remains cash generative despiteretiring the bank loan partially used to purchase Touchstar at a rate of £1million per year. Dividend Consistent with our policy of paying the highest dividend that the Company canafford and what we deem the most effective use of funds for Shareholders, theBoard is pleased to recommend an increased final dividend of 0.38p per ordinaryshare (2006: 0.36p). This will be paid on 11 June 2008, subject to approval atthe AGM, to shareholders on the register on 9 May 2008. Employees When the acquisitions were made we said that we were delighted both by thequality of the staff concerned but also by their willingness to co-operate inthe difficult task of integrating the companies. This continues to be the caseand the integration of the Group has been a tribute to co-operation by bothstaff and management. Outlook 2007 has been a year in which Belgravium Group has made progress both throughour sales network and a widening of our technical capability. We have againdelivered an improvement in profit as some of the benefits we foresaw at thetime of the Novo IVC and Touchstar acquisitions have been realised. Lookingahead, there are some attractive projects in the pipeline and we look forward todelivering organic growth in 2008 and beyond. J P KemberyExecutive Chairman5 March 2008 Audited consolidated income statement Year ended 31 December 2007 2006 £'000 £'000 ------------------ ------ --------- --------- --------- ---------Revenue 10,637 10,922Cost of sales 4,407 4,552------------------ ------ --------- --------- --------- ---------Gross profit 6,230 6,370Distribution costs (98) (112)Administrative expenses (3,931) (4,265)------------------ ------ --------- --------- --------- ---------Operating profit 2,201 1,993 Finance income 28 32Finance expense (176) (181)------------------ ------ --------- --------- --------- ---------Profit before tax 2,053 1,844Taxation (634) (569)------------------ ------ --------- --------- --------- ---------Profit for the year attributable to equityshareholders 1,419 1,275----------------------------- --------- --------- ---------Earnings per share for profit attributable toequity shareholdersBasic 1.41p 1.27p----------------------------- --------- --------- ---------Diluted 1.41p 1.26p----------------------------- --------- --------- --------- Consolidated statement of changes in equity for the year ended 31 December 2007 Capital Called up Share redemption Retained share capital premium reserve earnings Total £'000 £'000 £'000 £'000 £'000---------------- -------- -------- -------- -------- --------Balance at 1January 2006 5,021 2,915 2,100 (2,630) 7,406Profit for theyear - - - 1,275 1,275Dividends(note 13) - - - (452) (452)---------------- -------- -------- -------- -------- --------Balance at 31December 2006 5,021 2,915 2,100 (1,807) 8,229New sharesissued 26 17 - - 43Profit for theyear - - - 1,419 1,419Dividends(note 13) - - - (504) (504)---------------- -------- -------- -------- -------- --------Balance at 31December 2007 5,047 2,932 2,100 (892) 9,187---------------- -------- -------- -------- -------- -------- Audited consolidated balance sheet as at 31 December 2007 2007 2006 £'000 £'000-------------------------- ----------- -----------Non-current assetsIntangible assets-------------------------- ----------- -----------Goodwill 9,124 9,124Other intangible assets 267 201-------------------------- ----------- -----------Property, plant and equipment 251 361Deferred income tax assets 7 27-------------------------- ----------- ----------- 9,649 9,713-------------------------- ----------- -----------Current assetsInventories 1,262 1,157Trade and other receivables 3,901 3,298Cash and cash equivalents 2 171-------------------------- ----------- ----------- 5,165 4,626-------------------------- ----------- -----------Current liabilitiesTrade and other payables 3,145 2,975Current income tax liabilities 472 324Financial liabilities: Borrowings 1,214 1,005Short term provisions 46 51-------------------------- ----------- ----------- 4,877 4,355-------------------------- ----------- -----------Net current assets 288 271-------------------------- ----------- -----------Non-current liabilitiesFinancial liabilities:Borrowings 750 1,755-------------------------- ----------- -----------Net assets 9,187 8,229-------------------------- ----------- -----------Capital and reservesOrdinary shares 5,047 5,021Share premium 2,932 2,915Capital redemption reserve 2,100 2,100Profit and loss account (892) (1,807)-------------------------- ----------- -----------Equity shareholders' funds 9,187 8,229-------------------------- ----------- ----------- Audited consolidated cash flow statement for the year ended 31 December 2007 2007 2006 £'000 £'000------------------------------- --------- ---------Cash flows from operating activitiesOperating profit 2,201 1,993Depreciation 179 199Amortisation 80 56Loss on sale of tangible fixed assets 2 -Movement in:Provisions (5) (122)Inventories (105) 91Trade and other receivables (603) (576)Trade and other payables 172 118------------------------------- --------- ---------Cash generated from operations 1,921 1,759Interest received 28 37Interest paid (178) (183)Corporation tax paid (466) (1,382)Corporation tax received - 180------------------------------- --------- ---------Net cash generated from operating activities 1,305 411------------------------------- --------- ---------Cash flows from investing activitiesAcquisition of subsidiary undertakings (net of cashacquired) - (700)Acquisition expenses - (356)Expenditure on intangible assets (146) (108)Purchase of property, plant and equipment (71) (169)------------------------------- --------- ---------Net cash used in investing activities (217) (1,333)------------------------------- --------- ---------Cash flows from financing activitiesProceeds from issuance of ordinary shares 43 -Proceeds from bank borrowings - 2,580Repayment of bank borrowings (1,000) (250)Repayment of loan notes - (2,580)Dividends paid to company's ordinary shareholders (504) (452)Repayment of capital on finance leases (10) (4)------------------------------- --------- ---------Net cash used in financing activities (1,471) (706)------------------------------- --------- ---------Net decrease in cash, cash equivalents and bank overdrafts (383) (1,628)Cash, cash equivalents and bank overdrafts at start of theyear 171 1,799------------------------------- --------- ---------Cash, cash equivalents and bank overdrafts at end of theyear (212) 171------------------------------- --------- --------- Audited reconciliation of net financial liabilities 2007 2006 £'000 £'000------------------------------- ---------- ----------Reconciliation of net financial liabilitiesNet decrease in cash, cash equivalents and bank (383) (1,628)overdraftsNet change in bank loans and finance leases 1,010 254Non-cash changes:New finance leases and hire purchase agreements - (14)------------------------------- ---------- ----------Movement in net financial liabilities in the year 627 (1,388)Net financial liabilities at beginning of year (2,589) (1,201)------------------------------- ---------- ----------Net financial liabilities at end of year (1,962) (2,589)------------------------------- ---------- ---------- Audited earnings per ordinary share 2007 2006----------------------------------- ---------- ----------Basic earnings per ordinary share 1.41p 1.27pDiluted earnings per ordinary share 1.41p 1.26p----------------------------------- ---------- ---------- Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary shares in issueduring the year. For diluted earnings per share, the weighted average number of ordinary sharesin issue is adjusted to assume conversion of all dilutive ordinary shares. Thedilutive ordinary shares represent the share options and warrants granted toemployees where the exercise price is less than the average market price of theCompany's ordinary shares during the year. Reconciliations of the earnings and weighted average number of shares used inthe calculation are set out below: 2007 2006 Weighted average Weighted number average of shares number Earnings (in Earnings of shares (in £'000 thousands) £'000 thousands)----------------------- --------- --------- --------- ---------Basic EPSEarningsattributableto ordinaryshareholders 1,419 100,665 1,275 100,426Effect of dilutivesecuritiesOptions - 166 - 500----------------------- --------- --------- --------- ---------Diluted EPSAdjustedearnings 1,419 100,831 1,275 100,926----------------------- --------- --------- --------- --------- Basis of Reporting This preliminary announcement has been prepared in accordance with InternationalFinancial Reporting Standards ("IFRS") and IFRIC interpretations as adopted bythe EU and with those parts of the Companies Act 1985 applicable to companiesreporting under IFRS. The preliminary announcement does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Thisannouncement has been agreed with the company's auditors for release. This preliminary announcement contains information extracted from the auditedfinancial statements of the group for the year ended 31 December 2007. Thestatutory accounts for the year ended 31 December 2007 will be sent to theshareholders shortly. The information for the year ended 31 December 2006 has been amended for theadoption of IFRS. The statutory accounts for the year ended 31 December 2006,which have been delivered to the Registrar of Companies, included an auditedreport which was unqualified and which did not contain a statement under Section237(2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange